The Philippine project cargo and heavylift business is riding an investment wave, thanks to the country’s political stability and the growing business confidence in the local economy.
Elmer Sarmiento, chief operating officer of Royal Cargo, one of the leading players in the project cargo and heavylift industry in the Philippines, is enthusiastic about industry prospects with the advent of many industrial projects, such as the wind farms in Ilocos Norte, Rizal, Iloilo, and Guimaras, as well as the construction of new power plants in Mindanao and the expansion of power plants in Masinloc in Zambales and Pagbilao, Quezon.
“With the confidence of investors, here come a lot of investments,” he told PortCalls in an interview.
The country could attract even more if not for the “quite restrictive economic [and foreign ownership] provisions in our Constitution. That’s why the business sector and the Joint Foreign Chambers of Commerce are pushing for the relaxation of these restrictions” he said.
A bright opportunity lies particularly in fabricating modules for industrial projects, as transporting these modules spells big business for heavylift operators. Sarmiento noted that Philippine-based fabricators can manufacture quality modules at lower costs compared with traditional sources such as South Korea, Singapore, and Malaysia.
Not smooth sailing
But with opportunities come problems, including the limited window to transport shipments. Sarmiento said that with the truck ban, port congestion, and the unusual nature of the shipments, transporting heavylift cargoes has to be done mostly at night when traffic is light.
Another hurdle is the seeming lack of comprehensive data on roads and bridges. While the Department of Public Works and Highways (DPWH) has a division for such concerns, it sometimes lacks information on weight limits, bridge design, and make. Thus, companies need to conduct their own investigation.
The DPWH’s implementation of Republic Act 8794 (Anti-Overloading Law) is an additional concern.
Sarmiento said the DPWH imposes truck configurations under the amended implementing rules and regulations of R.A. 8794 that are not applicable to heavy trucks and trailers used in heavy transportation.
He said heavylift players wrote DPWH about this, but were told to secure a DPWH permit for each time they would travel, a requirement that was quite cumbersome.
“It’s not a question of how heavy your cargo is. It’s about how much impact you make on the road,” he explained.
The impact can be reduced by adding more axle lines and tires to the transporter to distribute the cargo weight over a road or bridge. If a road or bridge can’t handle the cargo, “we reinforce the bridges or look for alternative routes,” Sarmiento said.
Another industry concern is the lack of a clear-cut national policy on vertical obstacles and clearance height. The executive claimed that the Philippines is one of the few countries in the world with “spaghetti” power lines and telephone cables dangling from electric posts.
He said the Manila Electric Company has a clearance height limit that local TV cable companies and local cooperatives ignore. Low entrance arches to barangays also pose extra work as they need to be taken down for tall cargo to pass through.
Royal Cargo solves this by positioning slanted bamboo poles atop trucks so that low-hanging cables simply slide and do not get entangled with passing cargo — an example of Filipino ingenuity, Sarmiento noted.
Drop-deck truck carriage, a key equipment in heavylift that can be lowered if the cargo is too high, is also used. Beams and stools called “elephant feet” are used together with hydraulic trailers to stow away cargo without having to use cranes.
Beyond issues with national policies, the industry is grappling with a shallow bench of professionals. Sarmiento said project cargo and heavylift players are always scrambling for new staff, sometimes looking abroad for trained Filipinos with offers to match their high salaries.
Beginnings
When its doors opened for business in 1993, Royal Cargo’s first project—the transport of heavy machinery for then-President Fidel Ramos’ fast-tracked power plant project in Bauang, La Union—encountered difficulties.
“We were on a barge when one of the trailers broke down,” Sarmiento recounted. “We sought assistance from a San Fernando-bound heavylift ship to lift the cargo for us. We were able to get that [help],” Sarmiento said, recalling that all he paid the ship captain for helping out was a bottle of liquor.
The problem was not completely solved, however, as the barge then ran aground and took a week to salvage.
“We brought in a salvor and tugs. We towed the barge and the bottom was damaged, but it was still afloat with the cargo on board,” he said.
To take the cargo ashore, Royal Cargo was forced to pull the barge with trucks.
“It was an all-Filipino job. We are proud of that,” Sarmiento said, adding humorously, “We’re not going to do that again,” referring to how the project was handled.
He said there are very few players in the project cargo and heavy lift industry in the country, and they have to work on setting themselves apart from the equipment owners that also offer project cargo and heavylift services.
DB Schenker, DHL, Panalpina, Antrak, and Hansa Meyer are some of the project cargo forwarders in the country, while the equipment owners include RV Marzan, Silver Streak, Ilagan, and G7, he noted.
For the Royal Cargo boss, the project/heavylift industry is the most exciting segment of the transport business. “It requires creativity. You learn something in every project.”
He explained, “[There are always] new people, new sites, new equipment, new projects,” adding that the players have to talk directly to the decision makers because each project costs billions of pesos.
Among Sarmiento’s favorite recent projects are Royal Cargo’s last two—the Taganito nickel mine in Surigao Norte and Petron’s refinery in Limay, Bataan. The Taganito project improved the company’s heavylift service standards with training received by the Royal Cargo staff from its Japanese client JGC. –– Photo by Roumina M. Pablo
Photo from www.royalcargo.com
